The law on new enterprises income tax was executed onJanuary 1, 2008. Income tax rate for both domestic and foreign enterprises is25% in China. This paper establishes a Computable General Equilibrium model toinvestigate the influence of the new company unified tax rate on foreignenterprises. This paper uses the 2007 national statistical data to calibrateparameters and obtains two equilibriums: benchmark equilibrium and 25% unifiedtax rate equilibrium. In addition, the influence on foreign enterprises isinvestigated through comparing the two equilibriums. This paper researches therelationship between unified tax rate and foreign direct investments. Finally,this paper does the sensitivity analysis of the foreign direct investments forthe actual foreign enterprise income tax rate and discount coefficients ofstate-owned enterprises’ return on capital.